Final Project created for Strategic Marketing class with Jim Prost, UC Berkeley Extension. (August 28th, 2013)

1. UC Berkeley Extension
Strategic Marketing -Professor Jim Prost
August 28th, 2013
Byron Pittam / Laura DellaGuardia /
Lisandra Maioli / Ryan Shi / Svetlana Fedorova

2. Introduction
Tesla
Motors
is
an
automobile
company
that
strives
to
ween
the
industry
off
oil-­‐based
combus3on
engines.
They
seek
to
create
cars
that
are
fun,
environmentally
friendly,
inspire
others
to
do
the
same
and
drive
the
car
industry
forward.
2-28

3. Per Elon Musk
h9p://www.teslamotors.com/blog/secret-­‐tesla-­‐motors-­‐master-­‐plan-­‐just-­‐between-­‐you-­‐and-­‐me
§ Build
sports
car
§ Use
that
money
to
build
an
affordable
car
§ Use
that
money
to
build
an
even
more
affordable
car
§ While
doing
above,
also
provide
zero
emission
electric
power
generaEon
opEons
§ Don't
tell
anyone.
So,
in
short,
the
master
plan
is:
3-28

4. Corporate Strategy
§ More
EV’S!
² Company-­‐owned
dealerships
² License
electric
powertrain
components
² Inspire
other
car
manufacturers
§ Premium
product
(Roadster)
² Trickle-­‐down
technology
² Use
of
early-­‐adopters
(Silicon
Valley)
§ Take
it
to
the
mass
market!
² SUV-­‐crossover
and
mini-­‐vans
² Cargo
vans
for
commercial
&
government
use.
² $30k
target
model
4-28

5. 2003 2008 2009
§ Founded
2006
§ Prototypes
of
the
Roadster
introduced
to
the
public
§ Global
Green
product
Design
Award
for
Roadster
§ RecogniEon
by
Time
Magazine
-­‐
“Best
InvenEons
-­‐
TransportaEon
2007
§ Index
Design
Award
for
Roadster
§ Two
batches
of
100
Roadsters
sell
out
fast
§ Full
producEon
begins
on
the
Roadster
§ December
-­‐
100th
Roadster
delivered
§ Opened
first
retail
store
in
Los
Angeles,
second
in
Menlo
Park
§ Unveiled
the
Model
S,
March
26,
base
price
$57k
§ Opened
European
showrooms;
London,
Munich,
Monaco
Milestones
5-28

6. 2010 2011 2012 2013 2014
§ Strategic
Partnership
announced
with
Toyota
§ IniEal
Public
Offering
§ Opened
Japan
&
Australia
showroom
§ ConEnued
with
European
showrooms
in
Zurich,
Copenhagen,
Paris,
Milan
§ Stopped
taking
Roadster
orders
§ Opened
Hong
Kong
showroom
§ Commercial
deliveries
of
the
Model
S
begin
§ Unveiled
Model
X
§ Began
building
Supercharger
staEons
§ Small
price
increase
announced
for
Model
S
§ Model
S
wins
² Motor
Trend
Car
of
the
Year
² Automobile
Magazine’s
Car
of
the
Year
² Time
Magazine’s
Best
25
InvenEons
of
2012
§ Push
to
be
profitable...SUCCESS!
§ Musk
promises
US
to
be
covered
with
Supercharger
staEons
(18
today)
§ First
parEal
recall
§ Model
X
will
enter
producEon
§ 80%
of
US
populaEon
covered
by
Supercharger
staEons
milestones
6-28

7. Other Electric Cars
§ Chevrolet
Volt
§ Nissan
Leaf
(75,000
as
of
August
2013)
§ Mistubishi
i-­‐MiEV
(30,000
as
of
June
2013)
§ Honda
Fit
EV
§ RAV4
EV
§ Renault
Zoe
§ Roewe
E50
§ Scion
iQ
EV
§ Chevrolet
Spark
EV
§ Smart
ED
§ Tesla
Model
S
(12,700
as
of
June
2013)
20
total
models
of
highway
capable
EVs
7-28

8. Other Electric Cars
§ Chevrolet
Volt
§ Nissan
Leaf
(75,000
as
of
August
2013)
§ Mistubishi
i-­‐MiEV
(30,000
as
of
June
2013)
§ Honda
Fit
EV
§ RAV4
EV
§ Renault
Zoe
§ Roewe
E50
§ Scion
iQ
EV
§ Chevrolet
Spark
EV
§ Smart
ED
§ Tesla
Model
S
(12,700
as
of
June
2013)
More
than
150,000
total
vehicles
have
been
sold
since
2008
TOP Selling
8-28

9. TOP Markets
Japan 28%
USA 26%
China 16%
France 11%
Norway 7%
9-28

10. Tesla Financials
§ $20
billion
market
capitalizaEon,
August
2013
§ 10
year
old
company
is
worth
more
than
Mazda,
Suzuki
and
Fiat
10-28

11. Target Audience
§ Wealthy
and
trendy
early
adopters,
§ Successful
professionals/entrepreneurs,
§ Upper
middle
class
city-­‐dwellers,
§ Tech-­‐savvy
and
green-­‐friendly
(eco-­‐hipsters)
"For
that
target
audience
(wealthy
and
tech-­‐savvy
niche
group),
the
more
exclusive,
the
more
expensive,
the
more
exo;c,
the
be=er,"
Phil
Go9,
senior
director
of
long
range
planning
for
IHS
AutomoEve.
h9p://news.naEonalgeographic.com/news/energy/2013/05/130522-­‐tesla-­‐motors-­‐success/
11-28

12. Target Audience
Mark,
27
years
old,
lives
in
the
Silicon
Valley,
where
created
his
own
start-­‐up
when
he
was
just
21.
He
makes
a
bunch
of
money
with
his
Tech
business,
loves
luxury
brands,
he
buys
products
by
its
performance
and
design
and
is
constantly
a=en;ve
to
the
new
launchings
in
the
tech
area
and
is
always
the
first
person
in
his
group
buying
the
cuKng-­‐edge
products.
He
is
also
concerned
about
having
a
healthy
life
and
being
green.
Persona:
12-28

13. Penetration Strategy
“Tesla's
strategy
is
similar
to
that
pursued
by
cell-­‐phone
and
flat-­‐screen
TV
makers,
which
started
off
selling
their
products
to
wealthy
early
adopters
then
cut
prices
to
mainstream
levels
as
the
technology
developed.”
Rachel
Konrad
,
Tesla's
spokeswoman
h9p://www.nbcbayarea.com/the-­‐scene/shopping/Abu-­‐Dhabi-­‐Joins-­‐Feds-­‐as-­‐Tesla-­‐Investor.html
13-28

14. Product attributes
§ “Design-­‐performance-­‐energy
efficiency”
§ No
dealers
(the
price
is
the
price:
no
negoEaEon)
or
commissioned
sales
person
§ TransacEons
being
conducted
online
14-28

15. Models
15-28

16. Model x
16-28

17. PositioningBurningFuelCars
ElectricCars
Luxury Cars
Valueable Cars
§ Tesla
is
posiEoned
as
a
high-­‐end
green
electrical
car's
company
in
a
luxury
market
with
a
unique
customer
experience
17-28

18. Product attributes
“More
than
any
other
company,
Tesla
has
helped
transform
the
popular
image
of
electric
cars
as
nerdy
golf
carts
for
do-­‐gooder
greens
to
something
that
can
be
fun
and
luxurious
and
packed
with
cuKng-­‐edge
technology.
It
pioneered
a
new
genera;on
of
electric
cars.
Whether
Tesla
can
rally
mainstream
consumers
to
the
world
of
electric
mobility,
however,
remains
to
be
seen.”
by
Josie
Garthwaite
for
NaEonal
Geographic
h9p://news.naEonalgeographic.com/news/energy/2013/05/130522-­‐tesla-­‐motors-­‐success/
18-28

19. KSF
§ Quality
and
design
of
the
cars;
§ Company
operaEonal
efficiency
and
costs;
§ Supply
and
distribuEon
chain
efficiency;
§ Flexibility;
§ MarkeEng;
§ Compliance.
for Automobile Industry
19-28

20. SCA’s
§ Technology
§ Ecosystem
§ Excellent
Performing
Car
20-28

21. Promotion
“Tesla
Motors
has
no
adver;sing,
no
ad
agency,
no
CMO,
no
dealer
network.
And
that's
no
problem.”
Michael
McCarthy,
AdverEsing
Age
21-28

22. Promotional activities
§ Social
media;
§ Word
of
the
mouth;
§ Website;
§ Trade/auto/motor
shows;
§ Tesla
brand
communiEes;
§ Product
reviews;
§ Customer
events;
§ Blogs,
forums;
§ Email
newsle9ers;
§ Press
releases;
§ CelebriEes.
22-28

23. SWOT Analysis
Opportunities Threats
Strengths
§ Well
known
CEO
with
good
track
record
§ Uses
Tesla
Stores
instead
of
tradiEonal
distribuEon
through
dealers
§ 1st
company
to
produce
a
fully
electric
luxury
car
§ Proprietary
technology
§ Based
in
SF
Bay
Area
§ Popular
in
younger
age
groups
who
are
likely
to
use
social
media
Weaknesses
§ CEO
is
also
CEO/CTO
of
SpaceX
§ Infrastructure
not
yet
developed
for
electric
cars
§ Customers
are
sEll
wary
of
such
new
innovaEons
§ Price
§ Increasing
awareness
and
support
for
environmentalism
§ Large
internaEonal
market
potenEal
§ New
lower-­‐price
models
appealing
to
a
wider
range
of
customers
§ Advances
in
tech
may
increase
ba9ery
life;
spark
other
innovaEons
§ CompeEEon
from
established
auto
companies
§ Lawsuits
could
inhibit/delay
innovaEons
§ Loss
of
government
subsidies
will
drive
up
prices
23-28

24. Marketing Strategy
Tesla the ‘Challenger and Rule Breaker’
§ Performance
through
technology
§ New
sales
model
and
distribuEon
§ No
tradiEonal
paid
adverEsing
§ ExcepEonally
good
at
creaEng
buzz
§ Over
achieving
results
§ Technology
needs
charging
staEons
§ Facing
distribuEon
difficulEes
§ CEO
has
split
Eme
§ Supply
and
demand:
ProducEon
§ Keeping
up
with
compeEEon
Pros Cons
24-28

25. Options
① Stay
as
is,
conEnue
on
the
revoluEonary
path.
② Stay
in
line
with
their
high
end
innovaEve
strategy,
build
their
own
factories
so
they
no
longer
rely
on
outsourcing
producEon.
③ Get
in
the
mass
market
family
car
game
quickly
before
it’s
too
late.
25-28

26. Tesla Summary Assessment
AlternaEves
(RaEng)
RelaEve
Weights
OpEon
1
OpEon
2
OpEon
3
Technology
.3
5
5
4
Emerging
CompeEtors
.2
1
2
5
New
CEO
.2
2
3
5
AdverEsing
.1
2
3
4
ProducEon
Outsourcing
.1
3
1
4
Geographical
Expansion
.1
3
3
4
Rela3ve
Weight
x
Ra3ng
1
2.9
3.2
4.4
Analysis
26-28

27. Recommendations
§ Nissan
Leaf
is
leading
the
market
§ CEO
is
crucial
to
new
vision
§ AdverEsing
to
keep
up
with
compeEEon
§ ProducEon
outsourcing
boost
§ Geographical
expansion
Option 3 :
Get in the mass market game quickly!
27-28

28. Questions?
28-28

29. Tesla Superchargers